July 4, 2002

David vs. Goliath

Are you afraid of the bogeyman? I'm not talking about Big Foot or the Yeti but the three-ton gorillas that loom over many of our businesses. With the national trend of larger companies expanding and smaller ones disappearing, you may find yourself facing a big player and wonder what you, David, can do to fight Goliath.

That's what happened to me in April 2000 when I was running an office furniture business. Swedish furniture behemoth IKEA was about to open its doors just a mile away from our showroom. I was confident that our quality, service, and specialty-focus would allow us to thrive. Yet, I still wanted to take advantage of IKEA's presence and tap into the increased retail traffic that their store would generate.

I jumped on the phone to speak with local, independent, and high-quality furniture showrooms that featured non-competing products (a bed store, an office furniture store, a contemporary furniture store, etc.). When I called the first meeting of the Berkeley Furniture Association, it felt like a gathering of Mob bosses. We all knew of each other but had always considered other furniture store owners as competitors. The awkward silence was quickly broken as we realized that we all stood to gain much from working together.

In less than two years, the Berkeley Furniture Association, a collection of seven stores, accomplished:

1) A burst of publicity when it flew a plane over Ikea's opening stating, "Welcome to Berkeley! www.berkeleyfurniture.com."

2) Prominent coverage, including two cover stories, in leading newspapers that brought more buyers into all member stores.

3) A shared web portal at www.berkeleyfurniture.com that became an important driver of Internet traffic to each furniture store's web site.

4) Two successful sales events generated through a mass mailing to all our customers and other prospects that were quite cost-effective since the expense of the mailing was split amongst the stores.

5) A much greater level of cooperation resulting in many more customer referrals amongst stores.

Do you belong to an industry in which you can transform your competitors into strategic allies? Before you say "no," take a few minutes to ask some "what if" questions.

What would a mutually beneficial relationship with a competitor(s) look like? What would you accomplish? Then, just start making calls. You'll probably be surprised at how receptive and creative your "competitors" will be when you get together and start tossing around ideas.

When a group of Davids get together, watch out Goliath!

Best wishes,
Patrick Galvin